Hydro proposes revised rates to become effective March 1, 2015

January 28, 2015: St. John’s, NL – Newfoundland and Labrador Hydro (Hydro) filed a request for interim rates today with the Newfoundland and Labrador Board of Commissioners of Public Utilities (PUB). The request is to set interim electricity rates effective March 1, 2015 until the completion of the General Rate Application (GRA) hearing, when final rates will be established.

The Interim Rate Application proposes rate changes for retail customers (residential and businesses) and Industrial Customers on the Island that reflect an updated forecast for 2015 fuel costs for the Holyrood Thermal Generating Station. In addition, it proposes a new rate change for customers in isolated communities. These communities will see rate changes equal to those approved for Newfoundland Power customers, based on an Order in Council  (a legislated direction) issued in December 2014.

When Hydro filed its Amended GRA on November 10, 2014 the average cost of No. 6 fuel used at Holyrood was $93.32 per barrel.  The most recent forecast puts the average cost at $65.63 per barrel.

If interim rates are approved by the PUB, most customer classes will see a proposed decrease of approximately 6.3 per cent in March.   This March 1 rate adjustment is proposed to replace the rate change related to the Rate Stabilization Plan (RSP), which would normally occur on July 1 to reflect fuel cost changes. RSP adjustments would continue annually in July 2016.

“At this time, Hydro believes it is appropriate to reflect a more current 2015 fuel forecast for setting interim rates for both retail and Industrial Customers,” said Rob Henderson, Vice President, Newfoundland and Labrador Hydro.  “It’s also important that interim rates are promptly set in order for Hydro to cover the costs associated with providing safe, reliable electricity to customers in this province.”

Interim rates are proposed to ensure the costs of operating the system are recovered, while the GRA process is carried out and the final rates are determined. Since the last GRA in 2007, there have been a number of factors affecting Hydro’s costs including changes in operating expenses, capital expenditures and new energy sources. Hydro’s GRA application will ensure electricity rates reflect the current cost to provide service.

“Hydro remains clearly focused on ensuring the delivery of reliable electricity to the people of this province now and in the long-term,” said Henderson. “The focus continues to be on managing our costs, while making the right capital investments in aging infrastructure to ensure we deliver safe, least-cost and reliable electricity service for our customers,” said Henderson.